UPDATE: Stifel Nicolaus Initiates Plexus at Hold on Stalling Margin Expansion

Stifel Nicolaus initiated its coverage on Plexus

with a Hold rating. Stifel Nicolaus commented, "Margin expansion has stalled due to the fact that sales growth is coming from new programs that typically require up-front investments and lower yields, whereas more mature programs with existing customers, which typically garner higher gross margins, have stagnated due to soft end demand and macro issues. We also note that several larger competitors have targeted Plexus' sweet spot in the “diversified” manufacturing space. Although we recognize that PLXS deserves a modest premium over competitors, we also do not believe it warrants a multiple expansion at this point." Plexus closed at $32.79 on Wednesday.